The 16th amendment does not give the IRS the right to collect personal income tax.
Read this e-mail carefully and then check it all out. All ref to law is given.
The first thing we're going to do is look at what the Constitution says about taxation. The limitations in the Constitution restricting the direct taxation of individuals and their property are found in Article 1 in two different sections. Both sections specifically restrict the Federal government as to how it may lay direct taxes on the citizens.
Article 1, Section 2, Clause 3 states: "Representative and direct taxes shall be apportioned among the several states which may be included within this union, according to their respective numbers," and Article 1, Section 9, Clause 4 states: "No capitation or other direct tax shall be laid, unless in apportionment to the Census or enumeration herein before directed to be taken."
These basic sections of the Constitution have never been repealed or amended. The Constitution still forbids the direct taxation of individuals, their property, and their rights, unless the tax is apportioned to the State governments for collection.
To divide and assign according to a plan.
And Article 1, Section 10, Clause 1 states: "No State shall enter into any treaty, alliance, or confederation; grant letters of marquee and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility."
This Clause in the Constitution is why NEITHER the Federal, nor the State governments have any authority, either OVER, or TO UNILATERALLY ALTER, PRIVATE EMPLOYMENT CONTRACTS.
In 1895, Congress tried to pass an Act that imposed income taxes on the interest and dividends of U.S. citizens on deposit in U.S. banks. This Act was immediately struck down in Pollock vs Farmer's Loan and Trust Co. (157 US 429), wherein the Supreme Court ruled that it is unconstitutional to impose an income tax on the interest and dividends of United States Citizens on deposits in U.S. banks. The court ruled that the tax was unconstitutional because it was a direct tax that was not apportioned as required by the Constitution.This decision has never been reversed or overturned.
Excerpts from the Pollock decision include:
"...Ordinarily, all taxes paid primarily by persons who can shift the burden upon someone else, or who are under no legal compulsion to pay them, are considered indirect taxes; but a tax upon property holders in respect of their estates, whether real or personal, or of the income yielded by such estates, and the payment of which cannot be avoided, are direct taxes..."
And,"...Subsequently, in 1869, .... The question arose whether the law which imposes such a tax upon them was constitutional. The opinion of the Attorney General thereon was requested by the Secretary of the Treasury.
The Attorney General, in reply, gave an elaborate opinion advising the Secretary of the Treasury that no income tax could be lawfully assessed and collected upon the salaries of those officers who were in office at the time the statute imposing the tax was passed, holding on this subject the views expressed by Chief Justice Taney. His opinion is published in Volume XIII of the Opinion of the Attorney General, at page 161. I am informed that it has been followed ever since without question by the department supervising or directing the collection of the public revenue..."
And; "...A tax upon one's whole income is a tax upon the annual receipts from his whole property, and as such falls within the same class as a tax upon that property, and is a direct tax, in the meaning of the Constitution...."
And, "...We have unanimously held in this case that, so far as this law operates on the receipts from municipal bonds , it cannot be sustained, because it is a tax on the powers of the States, and on their instrumentalities to borrow money, and consequently repugnant to the Constitution.
It follows that, if the revenue from municipal bonds cannot be taxed because the source cannot be, the same rule applies to revenue from any other source not subject to the tax; and the lack of power to levy any but an apportioned tax on real and personal property equally exists as to the revenue therefrom.
Admitting that this act taxes the income of property irrespective of its source, still we cannot doubt that such a tax is necessarily a direct tax in the meaning of the Constitution. In England, we do not understand that an income tax has ever been regarded as other than a direct tax. In Dowell's History of Taxation and Taxes in England, given, and an income tax is invariably classified as a direct tax.."
And, even in dissent:...that personal property, contracts, obligations, and the like, have never been regarded by Congress as proper subjects of direct tax. The United States Constitution provides Congress the power to lay and collect taxes directly only as long as it is apportioned with regard to the census or enumeration."
Then, in 1913 Congress passed the 16th Amendment which says, "Congress shall have power to lay and collect taxes on income, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration."
So that changed everything, right? Well, NO ! That is not what the Supreme Court ruled. What the Supreme Court ruled, in Brushaber vs Union Pacific R.R. Co. and in Stanton vs Baltic Mining Co., is that since the provisions of Article I, requiring that direct taxes be apportioned
, were not repealed, they are still in full force and effect.
And, that since the language of the 16th Amendment specifies that the income tax is to be a tax without apportionment, then it cannot be a direct tax, because otherwise the Constitution would inherently contradict itself, which cannot be allowed to happen.
Article I cannot prohibit direct taxation unless apportioned, while the 16th Amendment grants the power to lay direct taxes without apportionment, because then the Constitution would inherently contradict itself and could no longer serve as a valid foundation for our Law.
So, to specifically prevent the Constitution from contradicting itself, the Supreme Court ruled that since the 16th Amendment provides for an income tax without apportionment, then the income tax cannot be a direct tax.
But, there are only two major classes of taxation authorized in the Constitution; direct taxes
and indirect taxes
So, if the income tax cannot be a direct tax, then it must be an indirect tax. Indirect taxes are classified into three minor categories in the Constitution: imposts, duties and excises. If you remember, the income tax started in 1861 as an Income Duty and a Federal employee "kickback", imposed only on foreign imports and Federal employees, which was contained and allowed within the Constitutional category of duties. As a duty it was only imposed on the flow of foreign goods into America, NOT DOMESTIC GOODS, NOR DOMESTIC INCOME.
Obviously today, the income tax is not currently being enforced as a duty, so the questions are: "Did the 16th Amendment create a new congressional power to tax directly ?", and; "How did the 16th Amendment change the income tax ?".
The answer to the first question was supplied by the Supreme Court in Stanton v. Baltic Mining Co., 240 US 112 (1916), stating:"...by the previous ruling, it was settled that the provisions of the 16th Amendment conferred no new power of taxation but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged.."
The Supreme Court clearly states that the 16th Amendment DID NOT create a new power to tax the People in a direct fashion without apportionment, AS IS FRAUDULENTLY CLAIMED BY THE IRS.
So, if it is not a direct tax, then it is still an indirect tax, but, possibly, no longer a duty. Then; "What kind of tax is the income tax now?" In the "previous ruling" referenced above, Brushaber v. Union Pacific R.R. Co. 240 US 1 (1916), the court stated:"...taxation on income was in its nature an excise ..." , and "...taxes on such income had been sustained as excises in the past...". specifically, "Moreover, in addition, the conclusion reached in the Pollock case did not in any degree involve holding that income taxes generically and necessarily came within the class of direct taxes on property, but, on the contrary, recognized the fact that taxation on income was in its nature an excise entitled to be enforced as such unless and until it was concluded that to enforce it would amount to accomplishing the result which the requirement as to apportionment of direct taxation was adopted to prevent, in which case the duty would arise to disregard form and consider substance alone,..."
The Court ruled that the 16th Amendment effectively transformed the income tax from an indirect duty to an indirect excise. It is not a direct tax without apportionment. And, if we examine the law closely, that is exactly what we find; that the income tax is imposed and applied under the law, as an indirect excise, ONLY imposed on specific entities (Federal), and sources of "taxable income" (privileged).
So, what is an excise tax ? Fortunately, the Supreme Court used to know what it was doing, and both of these decisions, Brushaber and Stanton, refer you to another case handed down five years earlier, Flint vs Stone Tracy Co. 220 U.S. 107 (1911), in which the Supreme Court ruled that excise taxes are:"...taxes laid on the manufacture, sale or consumption of commodities within the country, upon licenses to pursue certain occupations and upon corporate privileges; the requirement to pay such taxes involves the exercise of the privilege and if business is not done in the manner described no tax is payable...it is the privilege which is the subject of the tax and not the mere buying, selling or handling of goods."
The Supreme Court effectively establishes with this ruling that excise taxes are manufacturing taxes, sales taxes, and taxes on privileges. Privileges in the form of either licenses to pursue certain occupations, corporate privileges, and any other privileges granted to the individual by the government as well. One of these other privileges, is the privilege of being protected by the United States government in a foreign country under a tax treaty. The government normally would have no jurisdiction or ability to protect you or your business interests in a foreign country, but because of the existence of the tax treaty with that foreign government, your business is protected by the U.S. government outside their jurisdictional boundaries (the United States).
That protection, being afforded by the tax treaty, is construed to be a privilege granted to you by the government; and therefore, the income earned in that foreign country under the tax treaty, is privileged income and subject to the income tax.